Before you start thinking about how to invest your money, you should first look at how you can improve your savings behavior. Especially in the current corona crisis, there are completely new opportunities to put some money aside, as you can only spend it to a limited extent.
In the following article, we give a few tips on how you can save money in everyday life, which can then be invested sensibly in the second step. But let’s deal with the most important question first: why should you save at all?
Saving money?
As long as your salary is enough to live on and you can afford a nice vacation every year, you don’t need to save any money, right? Wrong! Because most people realize how important it is to have some money on the side at the latest when their car breaks down or the washing machine gives up the ghost. You don’t just pay an invoice of 500 euros or more out of petty cash.
If you have no savings, you often have to resort to an expensive overdraft facility and the vicious circle begins: Once the account is overdrawn, you can’t get out of the red so quickly. However, to prevent this from happening, you should always have some money ready for emergencies – about three months’ gross salary to be precise. We explain how you can achieve this quickly in our guide below.
But of course, saving money is not just about unexpected expenses. Sooner or later you will have to deal with the issue of retirement provision. “I can take care of that when I’m older,” is what everyone under 30 is thinking now. After all, retirement still seems a long way off, as you have only just started your career. One thing is clear: the state pension scheme is already not enough to ensure a comfortable retirement. Nobody knows what it will look like in 20 or 30 years’ time. So if you want to live well in old age, you should take care of this as early as possible.
Convert the price into working hours!
We’ve all been there: you see a beautiful item of clothing and want to take it with you straight away, but it costs 100 euros. You now have three options. The first and probably the least thoughtful would be to buy these pants immediately and add them to your other seven pants in your closet. But you can also sleep on them for one or more nights and then decide whether you really need them.
Then there is a third option, which most people will probably lose interest in immediately: Think about how long you have to work for the price of 100 euros. For example, if you earn 2,000 euros net per month and work 40 hours a week, you will earn a net hourly wage of 12.50 euros. So to earn 100 euros, you have to work eight hours. Is it really worth working a whole day for that new item of clothing?
Save money with the 50/30/20 rule
The principle here is simple: half of your income covers fixed costs such as rent, electricity, cell phone contracts, internet and so on. If you cannot pay your fixed costs with around 50 percent of your salary, this is an indicator that they are too high and there may be potential for savings. 30 percent of the money is for all variable costs – i.e. food, restaurant visits, movies or clubs. And now comes the crucial part: The remaining 20 percent of your income is saved. This means they go into a separate account before you are even tempted to spend it. We recommend that you set up a standing order so that the money is automatically debited when your salary is received.
The best way to do this is with a free call money account into which you can also deposit money at short notice, for example if you have some left over at the end of the month. You can also access your money quickly and at any time.
Writing a shopping list
You can also do something for your household budget when shopping. It’s best to go shopping on Saturday just before closing time. And write your wishes on a shopping list beforehand. You will then be less susceptible to the tempting offers on the supermarket shelves: The shortage of time forces you to shop carefully and concentrate on working through your shopping list. In addition, many fresh products – such as fruit, vegetables, salads and yogurts – are often cheaper before the weekend.
Pay in cash
Our brain registers the expenditure significantly more when we pay in cash than when we pay by card. With banknotes in particular, you usually have a good overview of how much money is still available or no longer available. This is also known as the reminder function of cash. In addition, we have a special relationship with money. The pain center is activated in the brain during the payment process: There is a pain of loss when we spend money. However, this is significantly greater when paying with cash than with an alternative payment method. It doesn’t matter whether we pay by card or smartphone. The situation is similar with online payment services such as PayPal. Ultimately, this means that paying by card means less pain.
So if you want to save money, you should simply pay with cash in future, even if it is becoming easier and faster thanks to smartphones and Girocard. If you don’t want to do without it, you can at least display the account balance afterwards when paying with your smartphone to reactivate the pain center.
Muck out
To clear your head and become aware of the things you really need, you should first sort out your own possessions. Minimalism is in vogue and has a number of positive effects on consumer behavior – and therefore also on your wallet. If you take a look at your possessions, you will quickly discover some items that you didn’t even know you owned. In addition, there are things that you no longer have any use for and that may even be a burden.
Therefore, sort out items that are a burden and sell duplicate or useless items. This also sharpens your focus on the really important things in life. If you own less, you also have less need to buy new things. This will save you a lot of money in the long run.
Make a tax return
Employees often give away money because they pay too much tax. Many people don’t even file a tax return at all because it seems too complicated for them. If you don’t know your way around and are afraid of the effort, you should become a member of an income tax assistance association. Or you can hire a tax consultant for one or two years. You can also deduct the costs from your tax bill. After that, you will probably be so familiar with the subject that you will be able to complete your tax return online yourself.
Change energy provider
Heating costs will rise significantly from January 2021 due to Co2 pricing. So it makes sense to think about changing your energy supplier, as this can save you several hundred euros a year.
According to the comparison portal Check24, most electricity customers can save up to 300 euros per year. The savings potential is even higher for gas customers, who can save up to 500 euros per year on average. You also don’t have to fight your way through the jungle of tariffs yourself – providers such as Verivox or Check24 take care of that for you. As with all offers, however, you should exercise caution with extremely cheap providers. You should therefore choose a provider with a very good rating and perhaps also a provider whose name you already know.
